1. What is a Mortgage Payment?

A mortgage payment is a periodic (typically monthly) payment made to repay a home loan. It consists of principal repayment, interest charges, and often includes property taxes and insurance.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

Where:

• \( Principal \) — Original loan amount ($)
• \( Rate \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (loan term in years × 12)

Explanation: This formula calculates the fixed monthly payment required to fully amortize a loan over its term.

3. Importance of Mortgage Calculation

Details: Understanding your mortgage payment helps with budgeting, comparing loan options, and making informed decisions about home affordability.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate (as a percentage), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's included in a typical mortgage payment?
A: Principal, interest, property taxes, and homeowners insurance (PITI). This calculator shows principal and interest only.

Q2: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest paid. Longer terms reduce monthly payments but increase total interest.

Q3: What's the difference between fixed and adjustable rates?
A: Fixed-rate mortgages keep the same interest rate for the entire term, while adjustable rates can change after an initial fixed period.

Q4: How much should my mortgage payment be?
A: Many experts recommend keeping housing costs below 28% of gross monthly income, though this depends on your overall financial situation.

Q5: What are points on a mortgage?
A: Points are upfront fees (1% of loan amount per point) paid to reduce the interest rate. This calculator doesn't account for points.